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A judge on Tuesday opened the way to resume the sale of oil and gas leases on US public land, granting a court order against the suspension of new projects by the Biden administration and giving a blow to the president’s efforts to keep the country away from fossil fuels.
The Louisiana court ruled in favor of 13 fossil fuel states, including Texas, Alaska and Oklahoma, which granted a preliminary order against the White House pause on new leases. The decision allows the lease to resume as the court understands more arguments in the case.
“The omission of any rational explanation in the cancellation of the lease sales and in the enactment of the break, gives rise to this court decision that the plaintiffs also have a substantial probability of success in the that claim, “Judge Terry Doughty said.
The sentence was one significant setback for Joe Biden, who ordered the suspension of new leases for the development of fossil fuels on public land and water while a review of the permitting process was conducted.
The suspension, which did not affect existing drilling permits, fulfilled an election promise and marked the president’s most important move against the energy sector since campaigned a “transition away from oil.”
The Interior Department said it would comply with Tuesday’s decision, but would continue work on the review, which it said would “outline the next steps and recommendations.”
The department declined to comment on when lease auctions could resume.
The suspension did not affect activity on private land, which accounts for most of the U.S. oil and gas production. Instead, it was applied specifically to federally owned lands and waters, which account for approximately 22% of U.S. oil production.
But the judge ruled that the break could cause significant damage to states where production depends on public land. “Millions and possibly billions of dollars are at stake,” Doughty wrote. “The plaintiff states have a vested interest in revenue from leased land and gas sales.
The decision was well received by the oil industry. “The federal lease break is detrimental to our nation’s national security, environmental progress, and economic recovery,” said Kevin O’Scannlain, vice president of the American Petroleum Institute’s rising policy, the powerful Big Oil lobby in Washington. “We are pleased to see the court ruling that must resume the lease of natural gas and oil to federal lands and waters.”
The National Ocean Industries Association, which represents offshore drillers in the Gulf of Mexico, also welcomed the decision, which said it “simply confirms legal requirements” for the interior department to schedule maritime oil lease sales. and gas.
But Tuesday’s ruling is unlikely to be the last word on the matter. The preliminary instruction will remain in effect until the final resolution of the case or an appeal to a higher court.
“The victory may not last long,” wrote analysts at ClearView Energy Partners, a Washington-based consultancy. “Not only do we expect Interior to be able to appeal the ruling, but we also believe the Biden administration could try to stop the lease through other mechanisms.”
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